Correlation Between Marie Brizard and AEGEAN AIRLINES

Can any of the company-specific risk be diversified away by investing in both Marie Brizard and AEGEAN AIRLINES at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Marie Brizard and AEGEAN AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Marie Brizard Wine and AEGEAN AIRLINES, you can compare the effects of market volatilities on Marie Brizard and AEGEAN AIRLINES and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Marie Brizard with a short position of AEGEAN AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marie Brizard and AEGEAN AIRLINES.

Diversification Opportunities for Marie Brizard and AEGEAN AIRLINES

0.12

Correlation Coefficient

Marie Brizard  AEGEAN AIRLINES

Average diversification

The 3 months correlation between Marie and AEGEAN is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Marie Brizard Wine and AEGEAN AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEGEAN AIRLINES and Marie Brizard is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Marie Brizard Wine are associated (or correlated) with AEGEAN AIRLINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEGEAN AIRLINES has no effect on the direction of Marie Brizard i.e., Marie Brizard and AEGEAN AIRLINES go up and down completely randomly.

Pair Corralation between Marie Brizard and AEGEAN AIRLINES

Assuming the 90 days trading horizon Marie Brizard Wine is expected to generate 1.15 times more return on investment than AEGEAN AIRLINES. However, Marie Brizard is 1.15 times more volatile than AEGEAN AIRLINES. It trades about 0.09 of its potential returns per unit of risk. AEGEAN AIRLINES is currently generating about -0.02 per unit of risk. If you would invest  264.00  in Marie Brizard Wine on September 4, 2024 and sell it today you would earn a total of  122.00  from holding Marie Brizard Wine or generate 46.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Marie Brizard Wine  vs.  AEGEAN AIRLINES

Marie Brizard Wine

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marie Brizard Wine has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Marie Brizard is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

AEGEAN AIRLINES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AEGEAN AIRLINES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Marie Brizard and AEGEAN AIRLINES

The main advantage of trading using opposite Marie Brizard and AEGEAN AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marie Brizard position performs unexpectedly, AEGEAN AIRLINES can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in AEGEAN AIRLINES will offset losses from the drop in AEGEAN AIRLINES's long position.

The idea behind Marie Brizard Wine and AEGEAN AIRLINES pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.